In the last few years, purchasing a car is perceived more than a financial achievement. It is also perceived as a means of purchasing an asset. Purchasing this asset is easily achieved, with the fact that now, any individual can get the required financial assistance. A car loan, for example, is the perfect means to purchase a vehicle.
Although the car loan is slowly becoming a popular concept for most aspiring car owners, there are those who still possess preconceptions. Here are a few presumptions that have been explained:
Restriction from getting car loan due to poor credit history:
It is a known factor that a poor credit history is equal to a bad loan. However, many also believe that a poor credit history would lead to a high probability of a loan rejection. This preconception has been the leading cause for many applicants to reduce opting for this financial assistance. However, this is not entirely true. While there is a probability of a loan rejection, it would only occur in rare cases. In most cases, the loan application would be approved, with an increase in the interest rate and the down payment.
Financing can be done only on a new car:
It a misconception that a car loan can be used to purchase a brand new car. This has stopped a large portion of the car owners from applying for this loan. However, on the contrary, it can also be used to purchase a used car. However, there are certain restrictions when it comes to purchasing a used car. The value and year of the car are taken into consideration when applying for this loan. Additionally, most loans are not provided to car’s that are more than 5 years old.
Only an individual can apply for car loan:
This is one of the most common misconceptions about the car loan. Many aspiring car owners feel banks or financial institutes would only approve a loan application by a single applicant. However, there is no strong ruling for this conditioning. In other words, there is no reason why an individual can apply for a car loan, along with a co – applicant. Only, in this case, the financial profile of the co – applicant is taken into consideration when the overall amount of the loan is reviewed.
No easing in the terms and conditions of the loan application:
As a loan applicant, you will need to review all the terms and conditions of the loan contract. Many loan applicant’s perceived these terms and conditions as a no – change policy. However, as an applicant, you are given the power to make necessary changes in the terms and conditions. However, in the end, they must match the requirements of the bank or financial institute as well.
Although the car loan is slowly becoming a popular concept for most aspiring car owners, there are those who still possess preconceptions. Here are a few presumptions that have been explained:
Restriction from getting car loan due to poor credit history:
It is a known factor that a poor credit history is equal to a bad loan. However, many also believe that a poor credit history would lead to a high probability of a loan rejection. This preconception has been the leading cause for many applicants to reduce opting for this financial assistance. However, this is not entirely true. While there is a probability of a loan rejection, it would only occur in rare cases. In most cases, the loan application would be approved, with an increase in the interest rate and the down payment.
Financing can be done only on a new car:
It a misconception that a car loan can be used to purchase a brand new car. This has stopped a large portion of the car owners from applying for this loan. However, on the contrary, it can also be used to purchase a used car. However, there are certain restrictions when it comes to purchasing a used car. The value and year of the car are taken into consideration when applying for this loan. Additionally, most loans are not provided to car’s that are more than 5 years old.
Only an individual can apply for car loan:
This is one of the most common misconceptions about the car loan. Many aspiring car owners feel banks or financial institutes would only approve a loan application by a single applicant. However, there is no strong ruling for this conditioning. In other words, there is no reason why an individual can apply for a car loan, along with a co – applicant. Only, in this case, the financial profile of the co – applicant is taken into consideration when the overall amount of the loan is reviewed.
No easing in the terms and conditions of the loan application:
As a loan applicant, you will need to review all the terms and conditions of the loan contract. Many loan applicant’s perceived these terms and conditions as a no – change policy. However, as an applicant, you are given the power to make necessary changes in the terms and conditions. However, in the end, they must match the requirements of the bank or financial institute as well.
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